Chiara Scotti, Deputy Governor of Banca d'Italia, told an international workshop in Rome on May 4 that the EU should tokenize SEPA now, rather than waiting three years for a digital euro. With €116 trillion in non-cash payments processed across the SEPA network in the first half of 2025, according to ECB data, the infrastructure already exists. The question is whether Europe acts before dollar-denominated stablecoins fill the gap.
SEPA: the infrastructure already exists
SEPA (Single Euro Payments Area) connects 36 European countries every time someone wires money from London to Madrid or pays a utility bill from Amsterdam. In the first half of 2025, non-cash transactions processed over SEPA reached €116 trillion, a 2.9% increase year-on-year, according to the ECB. The network is standardized, interoperable, and trusted by hundreds of millions of users.
The problem, as Scotti framed it, is settlement speed and the absence of programmability. Traditional SEPA transfers involve intermediaries and delays. A tokenized version would deliver real-time settlement on a distributed ledger, support for smart contracts, on-chain transparency, and the ability to integrate payments with tokenized financial products. Think of the £50 billion in tokenized funds that Legal & General has already brought onto Ethereum. And none of it would require building a new network from scratch.
Scotti described SEPA as a “distinctive European asset”, a deliberate choice of words. Europe doesn't need to invent a new payments infrastructure. It already has one. The decision is whether to bring it on-chain before others do it instead.
Fast payment systems and their interlinking across borders offer a concrete opportunity to transform cross-border #payments. Deputy Governor #Bankitalia Chiara Scotti spoke today at Reykjavík Economic Conference 2025, Central Bank of Iceland @centralbank_is.
, Banca d'Italia (@bancaditalia) May 8, 2025
Read her… pic.twitter.com/f6Rp4Z7xCG
What tokenized SEPA would change for businesses and treasuries
For any firm managing cross-border payments in euros, the practical shift would be significant. A payment between London and Frankfurt that currently takes hours on SWIFT or days on direct debit could settle in seconds on a shared distributed ledger, with the same institutional guarantees that exist today, because regulated banks with real deposits would still stand behind it.
Not private stablecoins. Not an ECB CBDC. Tokenized deposits: digital representations of existing bank deposits, issued by the same banks that manage current accounts today. Banca d'Italia, alongside 63 other institutions, has already tested this model. In DLT trials conducted by the ECB between 2023 and 2024, more than €1.59 billion was settled across over 200 transactions, all in central bank money, according to ECB disclosures.
Counterparty risk running through correspondent banking chains would be eliminated. For UK and European businesses currently using cross-border stablecoins or holding euro treasury on USDC via Solana, tokenized SEPA deposits would represent a regulated, euro-native alternative that doesn't depend on a San Francisco issuer.
The stablecoin pressure Europe cannot ignore
Functionally, the stablecoin market surpassed $322 billion in May 2026, according to The Block. ECB projections suggest adoption in emerging markets such as India and Brazil could push that figure toward $730 billion. Two-thirds of card transactions in the eurozone already flow through non-European networks. In 13 of the 21 eurozone countries, in-store payments depend entirely on Visa and Mastercard.
Piero Cipollone, ECB Executive Board member and also present at the May 4 workshop, stated that DLT-based markets require tokenized central bank money not as an option, but as a precondition. The digital euro remains the most analytically advanced project, with pilots beginning in mid-2026 and a possible issuance date of 2029, contingent on the EU Regulation passing this year. That's a three-year horizon. Dollar stablecoins are already in the wallets of millions of Europeans today.
Scotti's argument is straightforward: don't wait until 2029. SEPA already has the network, the standards, and institutional trust. Bring it on-chain.
The ECB's Project Pontes, which aims to link TARGET infrastructure to DLT platforms, is set to enter its pilot phase in Q3 2026. Project Appia, the longer-term work on an integrated European ecosystem for tokenized assets, runs on a roadmap through 2028. Citi estimates that global tokenized deposit volumes could reach $100-140 trillion by 2030, as reported by Finzly and American Banker. Today, only one in four banks is technically ready to support tokenized deposits, according to the same sources.
The EU Regulation on the digital euro remains the bottleneck that no one can eliminate by decree. Scotti didn't say that explicitly. But the implication of her Rome speech is clear: a tokenized SEPA gets around that bottle, using infrastructure that's already live, already regulated, and already trusted by 36 countries. The FCA and the Bank of England are watching this debate closely. So should every European treasury manager and fintech operator who still routes euro payments through non-European rails.
